The interaction of calmodulin (CaM) with two of its binding proteins, cyclic nucleotide phosphodiesterase (PDE) and calcineurin (CN), was investigated using two derivatives of CaM. Dansyl-CaM, a fluorescent derivative, exhibits changes in its polarization of fluorescence (indicative of complex formation) concomitant with the filling of two higher affinity calcium-binding sites when incubated with these binding proteins. However, when PDE activity was assayed with N-6 etheno cyclic AMP as substrate under conditions identical to those used for fluorescence measurements, somewhat more calcium was required for activation, suggesting that the filling of the third (and perhaps fourth) calcium sites was required for stimulation. Thus, the calcium requirement for interaction of dansyl-CaM with phosphodiesterase appears to be different from that for enzyme activation. Pyridyldithiopropionyl CaM (PDP-CaM), an activated sulfhydryl derivative, formed covalent complexes with both CN and PDE, as judged by SDS gel electrophoresis, suggesting that free sulfhydryl groups are present at or near the CaM-binding domain of these proteins. The cross-linked PDP-CaM/PDE complex retains full enzymatic activity and, after isolation by gel filtration in the presence of metal chelators, appears fully stimulated without addition of calcium. This activated state is not inhibited by CaM antagonists; responsiveness to calcium and CaM can be restored by incubation with reductant. These findings are consistent with formation of a disulfide-linked complex in which PDE exists in an activated conformation which does not require calcium for activity. The use of this cross-linking derivative may thus prove useful in investigations of the mechanism of calmodulin activation and may, through use of selective proteolysis, permit the isolation of specific domains which interact with CaM.